Tesla Motors today completed an agreement with Japanese electronics giant Panasonic to build a huge battery plant in one of five states – including Texas.

Although the electric car-maker won’t make a decision on the location of the plant until later this year, the agreement stipulates that Panasonic will fund the investment of the battery line and oversee production.

Tesla will be responsible for the acquisition of land, manage the construction of the factory and will be in charge of the so-called gigafactory, according to TheDetroitBureau.com.

The factory, which will employ up to 6,500 people, hopes to reduce the high cost of lithium-ion batteries by greatly increasing the supply.

“The gigafactory represents a fundamental change,” said J.B. Straubel, chief technical officer at Tesla. “Not only does the gigafactory enable capacity needed for the [new] Model 3, but it sets the path for a dramatic reduction in the cost of energy storage across a broad range of applications.”

Tesla is considering five states as possible locations for the factory:Arizona, California, Nevada, New Mexico and Texas. The California-based company has also said it may build more than one gigafactory.

Tesla builds the Model S electric sedan and intends to add two more models of electric vehicles, including a $35,000 mid-size sedan.